DTN Closing Grain Comments

General Comments:

Corn was down 2 1/4 cents in the July contract and down 1 3/4 cents in the December. Soybeans were down19 1/2 cents in the July contract and down 20 1/2 cents in the November. Wheat closed down 12 1/4 cents in the July Chicago contract, down 16 1/2 cents in the July Kansas City, and down 14 1/4 cents in the July Minneapolis contract. The September U.S. dollar index is up 0.19 at 94.65. August gold is down $1.40 at $1,278.70 while July silver is down 9 cents and July copper is down $0.0580. The Dow Jones Industrial Average is down 273 points at 24,714. August crude oil is down $0.86 at $64.83. August heating oil is down $0.0099 while August RBOB gasoline is down $0.0214 and August natural gas is down $0.052.

Corn:

July corn closed down 2 1/4 cents at $3.53 3/4 Tuesday, a moral victory that dipped early, but kept spot prices above the 2018 low of $3.45 1/2 on the close. Tuesdays are not normally this volatile, but this one started with news that President Donald Trump was moving toward imposing another $200 billion of tariffs against China if China proceeds with their new tariff list on July 6 -- a $34 billion list that includes a 25% penalty on U.S. soybean imports. The trade issue does not directly involve corn, but there is general concern as investors retreated from global stock markets and most commodities. Closer to home, heavy rain amounts are in the five-day forecast for the Corn Belt, adding to flooding problems in local areas, but also keeping crop conditions high overall. Late Monday, USDA said 78% of corn was rated good to excellent, putting DTN's Corn Condition Index at 188, the highest score since 1994. Fundamentally, USDA's estimate of lower world ending corn stocks in 2018-19 should be supportive to prices. Technically, the trends remain down for corn with the December contract posting a new contract low. DTN's National Corn Index closed at $3.26 Monday, its lowest price in four months and 30 cents below the July contract. In outside markets, the September U.S. dollar index is up 0.23 while nearly all other commodities were lower.

Soybeans:

July soybeans finished the day down 19 1/2 cents at $8.89 in a widely volatile day of trading that saw prices down 67 cents after news broke that the U.S. is planning on enforcing another $200 billion of tariffs against China, if China enacts its latest list of new tariffs on July 6 as promised. The tariff topic is personal for soybeans as a 25% tariff on U.S. soybeans is included in China's new list and there is a growing concern about how or where this back and forth slapfest of tariffs will end. Even without the escalating trade war, soybeans are having a difficult time finding a bullish argument. Late Monday, USDA said 97% of soybeans were planted and 90% were emerged; 73% of crops were rated good to excellent, resulting in a favorable DTN Soybean Condition Index score of 177. The largest problem area was in Missouri where 19% of the crop was rated poor-to-very poor. This week's forecast expects heavy rain amounts across the Midwest, some of which will cause flooding problems, but is generally seen as beneficial to crops. Technically, the trend remains down for soybeans with the July contract now at its lowest spot price in over two years. The November contract, at $9.11, is near its 2017 low of $9.07 and is also getting closer to its 2015 low of $8.53 1/4. DTN's National Soybean Index closed at $8.46 Monday, priced 63 cents below the July contract and close to its 2017 low of $8.40.

Wheat:

July Chicago wheat closed down 12 1/4 cents and July K.C. wheat was down 16 1/2 cents at $4.77 3/4 on Tuesday, posting its lowest close in over two months as this year's bullish hopes appear to be deflating out of wheat prices. Late Monday, USDA said 95% of winter wheat was headed and 27% was harvested with rapid progress in Arkansas, Oklahoma, and Texas. Kansas was 23% harvested. Crop conditions continue to rate well outside of the southwestern Plains. For spring wheat, USDA said 78% of crops were rated good to excellent, the most since 2010. This week's forecast continues to look mostly favorable for spring wheat areas, while heavy rain may interrupt harvest progress in Kansas and Nebraska. Outside North America, the only trouble spot in need of rain continues to be southern Russia and possibly, eastern Ukraine. So far, it is looking like world wheat production in 2018 will be down a little -- USDA says down 2% -- but overall wheat supplies are likely to stay ample. Technically, the trends for all three wheats are now lower after July Chicago wheat fell below its May low on Tuesday. The bearish changes were not totally unexpected as the seasonal highs for wheat prices typically arrive around early July. DTN's National SRW Index closed at $4.68 Monday, down from its highest price in ten months and 22 cents below the July contract. DTN's National HRW Index closed at $4.92, down from its highest price in over two years.

Todd Hultman can be reached at todd.hultman@dtn.com

Follow Todd Hultman on Twitter @ToddHultman1

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